Payroll & statutory · Updated September 2026
Section 80CCD(1B) is a tax deduction reserved specifically for your own contribution to the National Pension System, and it’s genuinely additional: it sits on top of Section 80C rather than competing with it for the same room.
You can deduct up to ₹50,000 for your own NPS contribution under 80CCD(1B), over and above the ₹1.5 lakh ceiling under Section 80C (which itself can include an NPS contribution under 80CCD(1), just capped inside that combined 80C limit). Used together, that’s up to ₹2,00,000 in deductions from NPS and other 80C investments combined. The catch: 80CCD(1B) is available only in the old tax regime. If you’ve moved to the new regime, this specific deduction isn’t available to you.
Section 80CCD(2), a different subsection entirely, covers your employer’s NPS contribution on your behalf, and that one is available in both tax regimes: up to 10% of basic plus DA in the old regime, or 14% in the new regime, for private-sector employees (government employees get 14% either way). It’s easy to mix these two up since they’re both NPS-related and both start with 80CCD, but one is your own voluntary contribution with a hard ₹50,000 cap and old-regime-only availability, and the other is your employer’s contribution with a percentage-based cap available under either regime.
No. It’s an old-regime-only deduction. The new regime allows the employer’s NPS contribution under 80CCD(2), but not your own voluntary contribution under 80CCD(1B).
No, that’s the point of the subsection. It’s a genuinely separate ₹50,000 allowance, not a carve-out from your existing 80C room.
Yes. A common approach is to first fill the 80C room (up to ₹1.5 lakh across all 80C investments, NPS included) and then direct further NPS contribution specifically into the ₹50,000 80CCD(1B) bucket.
See the employer side of NPS contributions with the NPS Employer Contribution Calculator, and check the overall tax impact with the Income Tax Calculator.